The Cost of Inaction is Higher Than the Cost of Action — Why Businesses Must Help Achieve the SDGs or Risk Losing Everything

“How do you decarbonize a global economy when everybody is a carbon junkie?”

This is how Paul Polman, former CEO of Unilever and Sustainable Development Goal advocate, kicked off his passionate plea for businesses to become more socially and environmentally responsible at the SDG Business Forum in October of 2019.

What the highlight video here, and then keep reading to see how you can help make businesses more responsible.

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Why businesses must become more responsible

“The two biggest challenges that need to be addressed are climate change and inequality, and frankly they’re closely related… By not addressing climate change we’re actually pushing more people into poverty. And it’s not us, we are well protected in our islands of prosperity, when the majority of this world lives in a sea of poverty. This doesn’t work anymore.”

“Maybe we’ll be fine, but a heck of a lot of more people will be dying, and I don’t want to be responsible for that”

Many of the facts that Mr. Polman presented aren’t new:

• 826 million people go to bed hungry every night
• 160 million stunted children are born every year
• 30-40% of food is wasted
• 2 billion people are overweight or obese – the predecessor to a whole host of mental and physical healthcare issues
• 2 billion people don’t have access to clean sanitation
• 98% of the world’s population is not guaranteed nutritious meals (or even any meals) at the time of birth

These stats, and Paul’s plea, are even more pressing given the recent news about the climate crisis. According to the Washington Post, “In bleak [Nov 2019] report, U.N. says drastic action is the only way to avoid worst effects of climate change“. This report came out on top of 12 shattering reports on the perils of climate change published in the first 9 months of 2019 alone.

Issues related to failing governments, poverty, and healthcare are just as dire. Even worse: in order to achieve the SDGs, we need to make up a funding shortfall of two to three trillion dollars. To put this in perspective, all the global development budgets from governments combine to just 160 Billion. This is a massive gap, and it needs to be filled, and the private sector is the only way to fill this gap.

But Paul argues that filling this gap is not just a moral imperative. He explains that there is a massive business case to achieve the SDGs, and that the cost of not addressing these issues will cost more than not addressing them.

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A more compelling case for businesses to be socially responsible

“Achieving the SDGs is probably the biggest business opportunity that we’ve ever seen in the history of mankind. The cost of inaction is actually higher than the cost of action. The cost that businesses are incurring from any single goal is actually more expensive that the cost of achieving all of the goals.”

Today, the cost of climate change on the world is over five trillion dollars. The cost of wars if 8-10% of our global GDP, which is equal to about eight trillion dollars. If we solve these problems, not only will we not lose seven trillion dollars every year, but we will also create 26 trillion-worth of new market opportunities. Polman challenges anybody to find another market opportunity that offers a 15-times payout — it doesn’t exist on a scale this big.

So where can the money come from to help achieve the SDGs? Polman explains that over half the money in this world is sitting in zero to negative interest rates. 12 trillion of that in negative bonds alone. Polman shares the absurdity of this situation: “Now think about this… What does it mean if half the money is in zero or negative interest rates? It means its useless. So we’re cutting forests, we’re polluting the air, we’re putting plastics in the oceans to turn all the stuff that we find on this wonderful planet into money, to then discover that the money is useless. It’s a little bit bizarre isn’t it? So why don’t we then use that money and get back. Make the air clean, pick the plastics out of our systems, restore our forests. The cost of inaction is rapidly becoming significantly higher than the cost of action. This is the biggest business plan we’ve had in the history of mankind.”

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The solution?

“We know where the solution isn’t… we don’t need more people to go to Pluto or Mars to find answers.”

Instead, Paul Polman says there are two main things that need to happen: 1. People must change. 2; Business must change.

#1. Starting with the people.

What we need is more human willpower, not technology. He argues that 2% of the world’s population has won the lottery ticket of life, and this 2% needs to do the following to develop the willpower and motivation to make a difference. Instead of thinking that the 2% must make “sacrifices” or lose their position, he explains that this is about making an investment in the future for all, and provides guidance on how to do that:

1. We need people to really care. YOU need to really care.
2. We need to have more dignity and respect for each other.
3. We need to actively pursue equity for all, prioritizing gender equity which does not yet exist in any country.
4. We need more compassion for those living with and across borders who did not win the lottery ticket of birth.

As the Dalai Lama said: “When you seek enlightenment for yourself simply to enhance yourself and your position, you miss purpose. But if you seek enlightenment for yourself to enable you to serve others, you are with purpose.“

#2: Business must change

Polman explains that beyond saving lives (which should be reason enough), if businesses invest in the SDGs, they will be more profitable, employees will be more engaged, and the employer brand will be stronger.

Businesses must dedicate resources – their people, profits, products, and processes towards the SDGs.

What you can do to make your business more socially responsible

In the course of history there comes a time when Humanity is called upon to shift to a new level of consciousness to reach a higher moral ground. it clearly is the moment to do this, you’re actually doing something for generations to come.

We published a five-section, 7,000 words guide that will give you guidance — regardless of your level within a company — to help make your business more responsible.

If you have 13 minutes, take the time to watch Paul Polman’s full speech at the #SDGBizForum. And if you don’t have that time, I suggest you make it.